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Ex-BMW boss to lead VW
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September 7, 2001: 8:27 a.m. ET
Volkswagen says new head is Pischetsrieder, former chief of rival BMW
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LONDON (CNN) - For the man set to lead Volkswagen, Europe's No. 1 car maker, the appointment marks a comeback two years after being ousted as head of BMW.
Volkswagen on Friday named Bernd Pischetsrieder, 53, to take over from long-serving boss Ferdinand Piech.
Pischetsrieder trained as a mechanical engineer before joining luxury car maker BMW, where he became chief executive in 1993. He was fired in 1999 after his decision to buy the loss-making UK car maker Rover turned sour.
BMW last year offloaded the British firm, which came to be dubbed the English patient after a string of big deficits, by selling most of the company to investment group Phoenix for a nominal sum of £10 ($15).
Munich-based BMW (FBMW) also sold Land Rover, the best performing part of Rover, to Ford Motor (F: Research, Estimates) for  3 billion ($2.67 billion).
Piech rescued Pischetsrieder from the motoring wilderness, appointing him chief of its Spanish subsidiary Seat in July 2000.
Some auto industry watchers are concerned that Pischetsrieder may be indebted to Piech and overly influenced by him.
"I will continue the course of my predecessor," Pischetsrieder was quoted as saying in an interview with German mass circulation newspaper Bild. "For me the customer is the priority. My motto is: The worm must taste good to the fish, not the fisherman."
And the new chief added: "The biggest difference betweeen myself and Mr Piech is that I have a beard."
Mixed verdict on BMW record
Some analysts put Pischetsrieder's mishandling of the Rover car business down to the overbearing influence of Eberhard von Kuehnheim, the former head of BMW's supervisory board.
Nonetheless, the same commentators voice admiration for Pischetsrieder's drive to improve efficiency at BMW in the 90s.
That experience should come in useful with the European auto industry undergoing weakening demand as a global economic slowdown dents consumer confidence.
Forecasts for western Europe suggest declines in the volume of new car sales of up to 1.5 percent in 2001 and approaching two percent in 2002.
The European auto industry could be forced into a round of jobs cuts as Japanese competitors including Toyota, Honda and Nissan prepare to launch new cars.
Car prices could also come under pressure from the European Unions plans to end automakers' right to sell new cars through captive dealer networks.
Volkswagen stock rose 3.2 percent to 50.77 in Frankfurt trade on Friday after the appointment, which had been widely expected. The shares have fallen 12 percent this year, and are down 21 percent from a peak of 62.10 in March.
Growth under Piech
Piech will become a member of VW's supervisory board, and is widely tipped to take over as its chairman.
The outgoing CEO - the grandson of Ferdinand Porsche, designer of the company's original Beetle and founder of the sports car company bearing his name - has been credited with building Volkswagen's European market share to 20 percent since taking over as chief executive in 1993.
But many observers believe profits and shareholder interests took a back seat over that period because of the influence within the company of the State of Lower Saxony, Volkswagen's home state, which is a major shareholder with about 19 percent of the equity.
"We think VW will in future focus more on profits than on volume," Deutsche Bank analyst Christian Breitsprecher told Reuters. "Pischetsrieder's reputation for capital spending discipline will benefit VW and we may see a stronger free cash flow, which would be positive."
Pischetsrieder takes over as CEO of Volkswagen on April 17,
2002. 
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